The Basics of Revenue Recognition and Accrual Accounting for

School: Fashion Institute of Design & Merchandising - Course: MANAGEMENT OPERATIONS - Subject: Accounting

Samantha ClearyHomework 3 LO 2-1 1. We only record revenue for our business when we are paid cash (True / False) False LO 2-1. 2. How do we record Net Income? Revenue- Expenses LO 2-1. 3. What is accrual accounting (pg. 49)? Accounting system that recognizes expenses or revenues when they occur regardless pf when cash is exchanges LO 2-1. 4. If we provide a service in period 1, but get paid for the service we provided in period 2, which period do we record revenue? We record the revenue in period 1 when we provide the service LO 2-1 5. If we provide a service to a client, instead of being paid immediately we may get a r___________ from the client, also known as an I_____ Receivable, inflow

LO 2-1 6. Suppose you get paid now in cash to provide a service next week. When do you record revenue, now or next week? now LO 2-1 7. You provide a service now and get paid cash next week. Assets increase now or next week? Now LO 2-1 8. You only record revenue when you get paid cash. (True / False) False LO 2-1 9. You get paid cash now for services you provided last week. What kind of transaction is this? defferal LO 2-1 10. You get paid cash now for services you provided last week. Assets do not go up now. (True / False) True LO 2-1 11. Can assets increase without cash coming in? No